Building has some interesting research
An analysis by Building of the most recent full-year results from the eight major publicly listed housebuilders, shows that while pre-tax profits rose by 161% in 2011 to £556m on the previous year, the number of homes built increased by just 3% to 45,018. Operating profits also rose 47% over the same period.
What is happening? In large part the change is due to the large housebuilders, we can no longer call them volume housebuilders, have shifted to the high margin, small number of units, cherry picked, large houses, low risk, high end of the market and away from the high risk low cost end of the market.
The question is whether if with a resumption of confidence and mortgage lending they are able to resume volume building?
If they cannot, and with the heavy weight of sites on their balance sheets they paid way too much for they may not be able to, then if at some point we did have a proper ‘plan b’ of major investment in housing including social housing, we have to ask who can. We need to start thinking about alterative volume housing delivery models now so they are ‘shovel ready’ when plan B does eventually come – as it might in a panic at very short notice.